JJ needs to get the top line to grow 5 to 10 percent. They've got to find something that's large enough and growing rapidly enough to stimulate that growth. St. Jude could be a potentially attractive acquisition.
More Quotes from John Putnam:
When JJ lowered the price and came in at 63 a share, it was probably closer to what is the real worth of Guidant. The only thing I can say is this behavior, certainly the behavior of Boston Scientific, is not rational here. I just think they are playing a very dangerous game.John Putnam
They still need to look to do as large an acquisition, with as much growth, as possible. It's a huge company, and it's hard to get the top line to grow because the base is so big.
John Putnam
Let's put it this way. Last March when I initiated coverage of JJ, I thought they were overpaying for Guidant. This was before problems arose from the recalls. I believe that's still the case. This has gotten to be an irrational price.
John Putnam
My reaction still is one of concern about the top line. Until that's rectified, it's problematic as to whether they can get to the kind of growth rates they're looking for.
John Putnam
The reality is, JJ probably doesn't care, ... It has the money to pay whatever breakup fee is involved. I don't see somebody else walking in here and picking up Guidant.
John Putnam
For them to bid more than they originally bid would have signaled to other potential acquisitions that they didn't have the financial discipline they've always been known for.
John Putnam
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